What is Matic Network?
How Matic Network works
1. User deposits crypto assets in Matic contract on the mainchain (contract deployed on Ethereum chain).
2. Corresponding tokens get reflected on the Matic chain.
3. The user can now transfer tokens almost instantly.
4. A user can withdraw remaining tokens from the main chain by establishing proof of remaining tokens on Root contract (contract deployed on Ethereum chain).
What is Matic token used for?
- Pay rewards to block producers and proof publishers.
The Matic token
- Anyone can stake their Matic tokens on root contract.
- Block producers are selected by PoS Stakers. To achieve faster block generation times these block producers will be few in numbers.
- Anyone on the mainchain can submit the details of the transactions they think is fraudulent. If the challenge is successful, the stakes of the parties involved in the fraud are slashed and the challenger receives the slashed funds.
– 12% of its total supply of 10 billion tokens allocated to fund the staking rewards. Transaction fees will fund the network long term.
Validator Rewards = Staking Rewards + Transaction Fees
Staking rewards are elastically calculated
- With 5 % of supply staked: 120 % APY
- With 40 % of supply staked: 15 % APY
- 2–5% slashing if a validator double signs a checkpoint.
More about staking and slashing here.
Total supply: 10 000 000 000
12% staking rewards per year.